NEW YORK ( TheStreet) -- Before a small-business owner can effectively market their company, they must be able to differentiate themselves from the competition -- especially if they are selling common, commoditized items or services.

"The best marketing really needs to start by understanding not the thing you make or the service you provide, but how your product fits with clients and customers," says Art Saxby, founder of Chief Outsiders. The company places chief marketing officers into growth and midsize companies that can't afford to hire a full-time marketing executive. They typically stay for six to 12 months to help implement a strategy.

"How can you differentiate your company, your service, versus other people that make similar things? That may be in how you deliver it or maybe how you do your billing, or maybe you're the easiest company to deal with or you have the fastest turnaround," Saxby says. "Positioning a company is done more by understanding how you deliver your product or service to your customer differently than everyone else."

Saxby has worked in marketing and strategy at Frito-Lay, owned by PepsiCo ( PEP), Kelloggs ( K), Coca-Cola ( KO), H-P's ( HPQ) Compaq Computers and Imperial Sugar ( IPSU).

At Imperial Sugar, Saxby notes that the company had to find a way to differentiate itself from other sugar suppliers, since "our sucrose crystals are the same as everyone else's."

The answer: by becoming the best in the supply chain, "the best at getting the product delivered to the customer when they want it, how they want it ... through information exchange, information systems and on-time delivery," Saxby says. "Once we became the best supplier to deal with, we didn't have to fight the price battle as often."

For another example of a company determining its story, he pointed to Coca-Cola, although the means was a notorious marketing blunder that seemed to revealed how little Coca-Cola understood itself: the 1985 rollout of New Coke, which resulted in a consumer outcry and the quick return of the original formula, now branded as "Classic Coke."

"A lot of people think of New Coke many years ago as a huge tragedy," Saxby says. "It's the best thing that ever happened to that company because it taught them to really understand what people valued. And people value Coke as more than just the fizzy brown water. It was the whole experience of Coke."

He noted that Coke's recurrent polar bear campaign is particularly good branding because it denotes "connectedness, sharing and family" that can be linked to the company's story of authenticity.

Small firms can use similar tactics.

For a small IT firm, for instance, Saxby suggests rather than focusing on the services provided, the company create a brand and correlating marketing campaign suggesting "peace of mind, confidence and productivity," he says, "not that we have 4G."

-- Written by Laurie Kulikowski in New York.

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